At the beginning of this month, the World Bank selected the Australian bank Commonwealth Bank (CBA) to issue its pioneering bond that will be regulated using blockchain technology. The bond will be liquidated next week according to a Reuters report.
On Thursday, CBA confirmed to Reuters that the bond worth AUD $ 100 million ($ 73 million USD) will be traded via blockchain on August 28th.
Bond -i, the World Bank's first bond loan will be liquidated via Blockchain
In its previous announcement, the World Bank said its current bond issuance system is plagued by inefficiencies. The system provides several back-and-end, follow-ups and manual entries that can be slow, complicated and expensive. Therefore, he opted to use a blockchain-enabled system to order and transfer ownership of his last bond, the Bond-i.
Bondi-I is a two-year project designed to achieve a yield of 2.25% and is part of the $ 50- $ 60 billion of bonds sold by the World Bank each year to combat poverty and improve economic progress in the countries developing. It will be the first link by the World Bank to be regulated via blockchain. CBA will only provide for the issuance of the bond. It will do it through a blockchain network that has built on the ethereum platform.
Issuing bonds on Blockchain Networks
Using blockchain technology for bond agreements, both parties remove the need for intermediaries-which is clearing houses-as they are connected directly by the nodes on the network. This system has been described as faster, more efficient, convenient and the future of settlements.
Bond-I, however, will not rely entirely on the blockchain. Actual payments will be carried out off-line through the existing SWIFT system. Blockchain will be used to automate the issuing process.